EXHIBIT 10.28

                                       TO

                       REGISTRATION STATEMENT ON FORM SB-2



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                 CHANGE IN TERMS AGREEMENT WITH WESTAMERICA BANK








CHANGE IN TERMS AGREEMENT

Borrower:  MENDOCINO BREWING COMPANY, INC.; P. O. BOX 400 HOPLAND, CA 95449

Lender:  WESTAMERICA BANK SONOMA REGION CREDIT ADMINISTRATION 31 D STREET SECOND
FLOOR SANTA ROSA, CA 95404

Principal Amount: $600,000.00

Date of Agreement: October 1,1996

DESCRIPTION OF EXISTING INDEBTEDNESS.

THAT  CERTAIN  NOTE DATED MAY 17,  1996 IN THE  ORIGINAL  AMOUNT OF  $600,000.00
CURRENTLY MATURING ON SEPTEMBER 30, 1996 WITH AN OUTSTANDING  BALANCE AS OF THIS
DATE OF $600,000.00.

DESCRIPTION OF COLLATERAL

THIS NOTE IS SECURED BY THAT CERTAIN COMMERCIAL SECURITY AGREEMENT DATED MAY 17,
1996.

DESCRIPTION OF CHANGE IN TERMS.

EFFECTIVE THE DATE OF THIS AGREEMENT THE MATURITY DATE IS CHANGED FROM SEPTEMBER
30, 1996 TO APRIL 30, 1997.

ACCRUED  INTEREST  SHALL BE  PAYABLE  ON THE LAST  DAY OF EACH  MONTH  BEGINNING
OCTOBER  31,  1996 AND ON APRIL  30,  1997 ALL  OUTSTANDING  PRINCIPAL  PLUS ALL
ACCRUED BUT UNPAID INTEREST SHALL BE DUE AND PAYABLE.

EFFECTIVE THE DATE OF THIS AGREEMENT THE FOLLOWING  PROVISIONS SHALL BE ADDED TO
THAT CERTAIN BUSINESS LOAN AGREEMENT DATED MAY 17, 1996:

1)  BORROWER  SHALL  PROVIDE  TO BANK  WITHIN  45 DAYS OF EACH  FISCAL  QUARTER,
BORROWER'S BALANCE SHEET AND PROFIT AND LOSS STATEMENT FOR THE PERIOD ENDED.

2)  BORROWER  SHALL  PROVIDE  TO BANK  WITHIN 90 DAYS OF EACH  FISCAL  YEAR END,
BORROWER'S  BALANCE SHEET AND INCOME STATEMENT FOR THE YEAR ENDED,  AUDITED BY A
CERTIFIED PUBLIC ACCOUNTANT SATISFACTORY TO LENDER.

BORROWER AGREES THAT UPON EXECUTION OF THIS AGREEMENT TO PAY ACCRUED INTEREST TO
SEPTEMBER 30,1996 IN THE AMOUNT OF $4,875.00 AND A DOCUMENTATION FEE OF $150.00.

EXHIBIT 10.28



CONTINUING VALIDITY. Except as expressly changed by this Agreement, the terms of
the original  obligation or obligations,  including all agreements  evidenced or
securing  the  obligation(s),  remain  unchanged  and in full force and  effect.
Consent  by Lender to this  Agreement  does not waive  Lender's  right to strict
performance of the  obligation(s)  as changed,  nor obligate  Lender to make any
future change in terms. Nothing in this Agreement Will constitute a satisfaction
of the obligation(s).  It is the intention of Lender to retain as liable parties
all makers and endorsers of the original obligation(s),  including accommodation
parties, unless a party is expressly released by Lender in writing. Any maker or
endorser, including accommodation makers, Will not be released by virtue of this
Agreement.  If any person who signed the original  obligation does not sign this
Agreement below,  then all persons signing below acknowledge that this Agreement
is  given  conditionally,  based  on  the  representation  to  Lender  that  the
non-signing  party  consents to the changes and  provisions of this Agreement or
otherwise  will not be  released  by it.  This  waiver  applies  not only to any
initial  extension,  modification  or release,  but also to all such  subsequent
actions.

PRIOR TO SIGNING THIS AGREEMENT, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS
OF  THIS  AGREEMENT.   BORROWER  AGREES  TO  THE  TERMS  OF  THE  AGREEMENT  AND
ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE AGREEMENT.

BORROWER:

MENDOCINO BREWING COMPANY, INC.

By:  /s/ H. Michael Laybourn
     ------------------------
H. Michael Laybourn, President

By:  /s/ Norman H. Franks
     --------------------
Norman H. Franks, Chief Financial Officer






EXHIBIT 10.28                     
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